Precious Metals Market Analysis, By Michael Pennington (Copyright 2010 Pennco Coins)
Two months after India’s Reserve Bank made big global news with the purchase of 200 tonnes of gold from the International Monetary Fund (IMF), bullion traders are now waiting for the ‘golden’ news of 2010. The news in question: Will China buy the remaining 203 tonnes of gold from IMF soon?
Bullion trader and gold investors in China want the dragon country to take the plunge and buy the rest of the IMF gold, following India’s footsteps. India bought 200 tonnes of IMF gold for $1,045 an ounce. Soon after the India purchase, gold price zoomed to touch a high of $1,227 per ounce in November last year. Since then, the yellow metal price has come down.
Last year, IMF approved the long-talked-about sale of 1/8th of its holdings, in “a volume strictly limited to 403.3 metric tons, with these sales to be conducted under modalities that safeguard against disruption of the gold market.” The main IMF parameter to sell its gold reserve was that the sale has to be done at current market prices. So, now, the moot question is whether China will take the next step and buy 203 tonnes of gold from IMF at the current market price– range?
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